Indonesia’s cooperative kicks off smart phone production

Jumping on the bandwagon of local cell phone production, newly-founded cooperative Koperasi Digital Indonesia Mandiri (KDIM) on Friday started the production of a locally built smartphone under the brand of Digicoop.

The smartphone is set to bolster the domestic cell phone market currently dominated by big players, especially foreign manufacturers.

Unlike commercially distributed phones, this smartphone can only be obtained by becoming a member of the cooperative via its website, after which one needs to pay Rp 100,000 (US$7.48) per month for one year. Delivery occurs after two month of subscription.

KDIM chairman Henry Kasyfi Soemartono said the cooperative would produce 5,000 units in the initial phase, with pre-orders currently running at 1,500 units.

Henry further said the basic idea of the cooperative was to maximize peoplea��s power to create a strong local information technology business.

a�?A cooperative is the ideal format for crowdfunding in Indonesia,a�? said Henry during the event to kick off production. a�?It is neutral and everybody has the same say. It also provides benefits to its members.a�?

KDIM was set up in June last year by the Associations of Indonesian Internet Providers (APJII) and Indonesian Information and Telecommunications Society (Mastel).

It aims to bring the cooperative format to Indonesiaa��s information technology (IT) business currently saturated by giants.

The cell phone is the result of collaboration with a team of experts from the Bandung Institute of Technology (ITB) and is made in the factory of electronics manufacturer PT VS Technology in Cikarang, West Java.

Indonesia has seen its domestic phone industry rise in recent years, with some manufacturers, like Polytron, already running local factories.

Communications and Information Technology Minister Rudiantara, who was present during the event, said the economic model of a cooperative could be a solution for the IT business, including the ride-sharing business based on mobile phone applications.

a�?The Uber and Grab Car drivers need entities to operate, while both companies have yet to register as transportation companies. So, wea��ve suggested that they form cooperatives for the drivers,a�? he said.

Rudiantara said the government would support the development of KDIM, such as by facilitating synergy with cooperatives for ride-sharing.

Henry said KDIM had ambitions beyond smartphone-making, namely to buy a satellite and run an internet provider business. To do this, members interested in participating in the satellite purchase could deposit Rp 5 million and in return access internet for free for a lifetime.

a�?We need to find at least 500,000 people who want to participate, so that we can buy a satellite for the people,a�? Henry said, adding that a satellite would cost between $200 million to 250 million.

The plan would materialize in the next three years as preparations were still underway, he added.

Based on the latest APJII survey, Indonesia has 132.6 million internet users, the highest number in Southeast Asia and the fourth-highest globally. Half of its more than 260 million population still cannot access the Internet.

KDIM digital equipment head Teguh Prasetya said KDIM was preparing for designs for middle and high-end models. In the meantime, the cooperative tried to increase its local content, including applications, from 20.2 percent at present to 30 percent by the end of this year.